U.S. President Donald Trump has unveiled his three-step plan to re-open the economy, entitled “Opening up America Again.” Along with the announcement, the president has started encouraging political allies to “liberate” certain states that have shelter-in-place (social distancing) measures currently in effect.
There’s no question, the economic impact of social distancing is very evident in the steep decline in the price of oil, public company earnings releases, and the lack of commerce occurring at almost every level.
And the president is pushing hard for a re-opening of the economy as quickly as possible, as the clock ticks down to this fall’s presidential election.
There has been an ongoing debate in many countries on how fast to get back to “normal” business, but the U.S. is likely on the most aggressive track yet. As I read the reaction of many people over the weekend, much of the concern is not about the plan itself, but the timing of implementation.
The White House’s plan is being celebrated — and heavily criticized — by different political camps, but I have grave concerns about how this aggressive plan could create further problems for the livestock packing industry in the heart of America.
As Republican governors feel pressure from the president and his supporters for protocols to be lifted, I am concerned that this puts the packing industry at higher risk of increased cases, and further or prolonged shutdowns.
Some people worry that the American Midwest is yet to be hit by the severity of the virus, as the coastal regions of the U.S. get past their peak case numbers. The science of this is above my pay grade, but it’s definitely something to pay very close attention to, especially as it applies to packing plants.
Could the President’s push to reopen America be contrary to the best interests of the livestock sector? I am afraid so.
There is no doubt that a surge in restaurant demand would be highly beneficial to the protein complex as poultry, pork, and beef have essentially lost 50% of their market since intense lockdowns were initiated.
U.S. Agriculture Secretary Sonny Perdue has tried to reassure Americans that in terms of protein supply “this is not a supply problem, but a demand issue.” The reality is that we do have a supply issue if the packing industry becomes so constricted due to plant shutdowns that animals are not being slaughtered on time and wholesale supplies run short relative to grocery store demand.
We have already seen what can happen in states such as South Dakota that had limited social distancing measures in place. The Smithfield plant in Sioux Falls, SD, at last reporting had 644 cases of COVID-19 linked to the plant, and has been shut down indefinitely. While Minnesota’s Democrat governor is facing pressure to loosen restrictions in his state, JBS closed a large pork facility in southwest Minnesota (60 miles east of the Smithfield plant) on Monday due to an outbreak among employees.
To use a sports analogy, returning to normal, unrestricted life too soon carries the risks associated with a pitcher returning from the disabled list just a little too early. The pitcher wants to get back in the rotation to help his team push for the pennant but in truth he is too optimistic in his timeline. Against the advice of doctors, stepping in to the lineup two weeks too early to get some late August starts in could mean he finds out that the doctors were right and the right elbow injury that originally sidelines him has resurfaced in the worst way, knocking him out of the lineup until the next year, or worse.
We all want a return to “normal” when life is uninterrupted by physical distancing and unaffected by all the other painful parts of this pandemic. But the protein packing industry’s capacity is under serious threat from COVID-19. The push to “liberate” the economy could ultimately be very contrary to the best interest of the livestock industry.
The consequences could be more sick people, overweight livestock, shuttered plants, and producers looking for more subsidies all while consumers wonder when the pork and beef will return to the grocery store. Going slow now could mean we go faster later.